Postal workers convicted in UI thefts

This just came over from the state Department of Labor who worked with federal prosecutors: A group of postal workers have been convicted in connection with stealing Unemployment Insurance thefts:

The New York State Department of Labor (DOL) today announced the criminal convictions, by the U.S. Attorney for the Northern District of New York, of seven United States Postal Service employees in New York for stealing unemployment insurance benefits. The DOL identified more than 60 persons employed by the USPS as mail carriers, mail processing clerks or casual laborers who collected more than $425,000 in Unemployment Insurance benefits while working for the Postal Service. More than 20 of these cases were referred to the United States Attorney’s Office Northern District for criminal investigation and prosecution. Today’s announcement is the first of what are expected to be additional arrests resulting from this investigation.

Governor Andrew M. Cuomo said, “Unemployed New Yorkers and businesses are the real victims of scammers who take advantage of the unemployment insurance system. Fraud against our unemployment insurance system will not be tolerated. We will continue to put our efforts into preventing and investigating instances of fraud against the system.”

The arrests stemmed from an investigation initiated by the DOL’s Office of Special Investigations Major Case Unit. This unit uses innovative data mining to identify complex fraud against the Unemployment Insurance program. In this case, the unit compared federal wage data to identify those defrauding the government. The unit has identified other groups of federal and state employees, including IRS employees, who stole benefits from the Unemployment Insurance program. The Office of Special Investigations referred 771 cases last year for criminal prosecution.

The State Department of Labor’s Major Case Unit worked jointly with the United States Attorney’s Office Northern District, United States Department of Labor Office of the Inspector General and United State Postal Service Office of the Inspector General to further the investigation by analyzing USPS payroll, conducting interviews and calculating the fraud amounts. Some of the funds stolen were paid as a part of the American Recovery Reinvestment Act (ARRA) stimulus package.

They were charged with 18 U.S.C. §1919 – false statement to obtain unemployment compensation for Federal service, in taking fraudulent UI benefits while employed at the United States Postal Service between 2009 and 2012.

The Department of Labor thanked United States Attorney Richard S. Hartunian for the office’s partnership:

“We are always vigilant in enforcing the law, even when the case, sadly, involves public servants. The actions of these defendants undermine America’s trust in others serving the public and prohibit the system from benefitting those truly in need,” said United States Attorney Richard S. Hartunian. “Unemployment benefits are meant to provide crucial financial assistance to workers who become unemployed through no fault of their own. We will continue to work with our law enforcement partners to stop fraudulent schemes such as these which ultimately hurt the American public.”

“Today’s guilty pleas send a clear message that investigating fraud against the Unemployment Insurance Program remains a high priority for the Office of Inspector General. We will continue to work with our law enforcement partners to investigate those who seek to obtain benefits to which they are not entitled,” said Robert Panella, Special Agent-in-Charge of the New York Regional Office of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.

“These pleas come as a result of the excellent investigative collaboration between the U.S. Postal Service Office of Inspector General, the New York State Department of Labor Office of Special Investigations and the US Department of Labor Office of Inspector General,” said Rafael A. Medina, Special Agent in Charge of the USPSOIG’s Northeast Area Field Office. “The Postal Service prides itself in its dedicated and professional employees, but the very small percentage who stray away from those professional standards should know that law enforcement, at all levels, will always work closely to combat fraud against any federal or state program.”

Employers across the state contribute to the Unemployment Insurance Trust Fund. When the Fund is forced to pay out because of a fraudulent claim, employers have to pay more — and that means consumers will be paying more as well.

New York State operates one of the largest unemployment insurance systems in the country. In 2012, New York State paid out nearly $7.1 billion in total unemployment insurance benefits to 1.13 million people. At the height of the recession in 2009, the state paid out $9.2 billion in unemployment insurance payments to 1.2 million people.

“Governor Cuomo and the Department of Labor have a zero tolerance policy on Unemployment Insurance fraud – especially when it’s committed by government employees who should be serving taxpayers, not stealing from them,” said State Labor Commissioner Peter M. Rivera. “Our Major Case Unit at the Labor Department continues to uncover these acts of deception on a daily basis, and I am proud of the work we have done together with the U. S. Attorney for the Northern District of New York to bring these individuals to justice.”

The Department of Labor’s Major Case Unit partners with employers to aggressively investigate and root out unemployment insurance fraud within their businesses. MCU builds cases and refers them to local district attorneys to prosecute. During the last three years, DOL has uncovered more than $178,688,327 in fraudulent unemployment insurance overpayments and referred more than 2,500 cases to district attorneys and law enforcement agencies.

Anyone with information about unemployment insurance fraud should call the Department of Labor’s toll-free fraud hotline at (888) 598-2077.